NTPC Limited & Punjab National Bank do Their First PSU TReDS Transaction on M1xchange
by Shrutee K/DNS
M1xchange to facilitate financing between NTPC
and its MSME vendors
Association to create wider ecosystem for TReDS
as a relevant platform for online bills discounting mechanism
Mumbai,Tuesday, 23rd October, 2018: In a significant development, M1xchange, one of
the foremost exchanges dealing in Trade Receivables Discounting System (TReDS),
has started transacting with NTPC limited, a Maharatna CPSU. The digital
platform of M1xchange came into being in April last year to serve micro, small
and medium enterprises (MSMEs), which usually struggle to stay afloat due to
paucity of working capital. The coming together of M1xchange and NTPC Limited
would address the financing concerns of MSMEs in the power sector, an important
segment of the economy.
Launched by outsourcing and consulting firm Mynd Solutions,
M1xchange has already on-boarded many large corporates, their MSME vendors and
financiers (banks - public, private, foreign and NBFCs) to do the financing
transactions. The use of TReDS is aimed at improving the flow of funds to the
MSMEs by reducing the realization cycles of receivables. TReDS allows MSMEs to
post their trade receivables on the system and get them financed.
Talking about its association with M1xchange, Mr S. C. Chavady,
GM (Corporate Materials), NTPC Limited said, “TReDS is a
promising concept, coming at a time when the government is also giving a push
to the digital economy ecosystem. M1xchange platform would provide a reliable
tool to our vendors due to its competitive pricing mechanism. We would
encourage our MSME suppliers to participate and benefit from the M1xchange
TReDS platform.” The NTPC Limited is of the view that the TReDS initiative
has the potential to solve the working capital related issues for vendors
efficiently.
Ms Neerja Kumar, GM-MSME Department, Punjab National Bank said, “We at PNB are very encouraged to see
PSUs like NTPC helping their MSMEs to get early liquidity by bill discounting
on M1xchange. The digital platform offers transparency and helps us take quick
decisions on offering funding to MSME sector which is backbone of our economy.
We are excited to be a financier on M1xchange and thank Government of India and
RBI for setting up TReDS which is an innovative and inclusive platform to help
MSMEs raise working capital.” “We welcome NTPC Limited on board. It is an important development
for M1xchange as it allows us to serve one of the largest PSU. This association
reflects the growing trust and confidence for M1xchange. With
participation of NTPC, we are able to extend the benefit of Digital financing
to larger set of MSME vendors and fulfil the objective of TREDS, towards the
growth of economy,” said Sundeep
Mohindru, CEO, M1xchange.
About TReDs Platform: Trade Receivables Discounting System (TReDS) is a regulatory framework put in
place by the Reserve Bank of India under the Payment and Settlement Systems Act
2007 (PSS Act) to regulate the trade receivables between MSMEs, large
corporations and financiers. TReDS is an institutional mechanism set up in
order to facilitate the financing of trade receivables of MSMEs from corporate
buyers through invoice financing by multiple financiers. The TReDS will
facilitate the discounting of both invoices as well as bills of exchange.
Further, as the underlying entities are the same (MSMEs and corporate and other
buyers, including Government Departments and PSUs), the TReDS could deal with
both receivables factoring as well as reverse factoring so that higher
transaction volumes come into the system and facilitate better pricing.
About M1xchange: Mynd Solutions is one of the very few entities approved by RBI to
set up this online platform which is known as Mynd Online National Exchange or
M1xchnage. M1xchnage was launched in April 2017, to set-up and operates TReDS
under the Payment and Settlement System (PSS) Act 2007. M1xchange aims to
provide MSMEs Supply chain related cash flow finance at competitive rates
through an open bid process via multiple financiers. M1 employs the latest
technologies to ensure the authenticity of the underlying transactions.
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